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The School Review and Fiscal Accountability Division (SRFA) is responsible for analyzing the financial health of Michigan’s 893 active school districts, intermediate school districts (ISDs) and public-school academies (PSAs) as defined by; Public Act 436 of 2012, the Local Financial Stability and Choice Act, Public Acts 109 to 113 of 2015, the Revised School Code and the State School Aid Act in partnership with Michigan Department of Education (MDE).
Early Warning Identification
The School Review and Fiscal Accountability (SRFA) Division applies a financial projection model to the three most recent years of Financial Information Database (FID) data. The model incorporates four key financial indicators: enrollment, revenue, expenditure, and fund balance. The school districts, intermediate school districts, and public school academies that are projected to incur a deficit are contacted by SRFA to determine if corrective action has occurred. Districts that have not taken SRFA-approved corrective action will be identified as having potential fiscal stress.
The projection model spreadsheet linked below contains the formula used to project fund balances. This is the first step in identifying potential fiscal stress. This spreadsheet allows districts to input financial data to produce the projection model's result.
Another method in identifying potential fiscal stress is reviewing district and public school academy budgets and amendments. SRFA reviews the financial transparency pages of all districts and public school academies three times a year. Districts and public school academies that are projecting to spend a majority of their fund balance are contacted by SRFA to determine if corrective action has occurred. Districts that have not taken SRFA-approved corrective action will be identified as having potential fiscal stress.
REMINDER: MCL 388.1618(2) requires districts to post budgets within 15 days after adopting its annual operating budget and after each subsequent revision to that budget.
Districts Under Treasury Oversight
Potential Fiscal Stress Schools
Pursuant to Public Act 109 of 2015, the School Review and Fiscal Accountability Division is responsible for providing early warning and identifying potential fiscal stress in school districts and academies. The Division will evaluate historical trends and analyze data to identify if potential fiscal stress exists.
Enhanced Deficit Elimination Plan (EDEP)
Districts that incur a general fund deficit projecting to last five years or more are under Treasury oversight and thereby required to develop an approved Enhanced Deficit Elimination Plan (EDEP). An EDEP includes monthly reporting of year-to-date revenue, expenditure, and cash flow in addition to the approved deficit elimination plan.
Public Act 436 Schools
The following school district is subject to Receivership-Transition Advisory Board oversight pursuant to Public Act 436.
Commissions and Committees
Detroit Financial Review Commission (FRC)
The Financial Review Commission (FRC) is responsible for oversight of the City of Detroit, the School District for the City of Detroit (DPS), and the Detroit Public Schools Community District. It ensures both are meeting statutory requirements, reviews and approves their budgets, and establishes programs and requirements for prudent fiscal management, among other roles and responsibilities.
Community Engagement Advisory Committee
A Community Engagement Advisory Committee is established to facilitate the on-going exchange of information between the various community, local, and state stakeholders concerning operations, financial, budgetary and other matters that are essential to the long-term viability of the impacted school district or local government unit.